Key Takeaways
Trump Media reported a $20 million Q2 loss despite its $2B Bitcoin treasury, raising questions about its crypto gains. Meanwhile, it pushes ahead with digital ventures like Truth.Fi and tokenized subscriptions.
Trump Media & Technology Group [DJT], the firm behind Truth Social and a vocal backer of a Bitcoin [BTC] treasury strategy, saw its stock drop nearly 4% on the 4th of August to $16.92 after reporting a $20 million net loss for Q2.
Source: Google Finance
This drop seems to be largely driven by $15 million in legal fees tied to its prolonged SPAC merger.
The legal entanglements, including lawsuits against its SPAC sponsor and former Truth Social co-founders, appear to be weighing heavily on investor sentiment.
Bitcoin billions, but no Tesla bounce
What makes Trump Media’s Q2 performance even more surprising is its aggressive Bitcoin strategy, especially in contrast to firms like Tesla, which reported a $284 million profit from BTC holdings in the same quarter.
Tesla’s strong earnings, including a jump in net income to $1.2 billion, reflect the broader market rebound and new accounting rules allowing firms to report unrealized crypto gains.
Yet despite holding the fifth-largest Bitcoin treasury among public companies and boosting its assets to $3.1 billion, Trump Media hasn’t seen similar benefits.
Utility token plans
With a $4.7 billion market cap, Trump Media’s sluggish stock has sparked questions about its unrealized crypto advantage.
Trump Media appears to be deepening its digital asset ambitions, as revealed in a recent SEC filing. It outlined the company’s upcoming utility token linked to its Patriot Package subscription service.
The program will reward users with “gems” that will eventually convert into a token usable across Truth Social and its streaming platform, Truth+. However, it is still in beta mode.
While it’s unclear if this token will be blockchain-based, Trump Media envisions it as a payment method for subscriptions and other future services within its ecosystem.
ETFs delayed, Washington steps in
The company reaffirmed its intent to launch digital asset ETFs, although the SEC has delayed its decision on the proposal until the 18th of September to allow more time for review and public feedback.
In fact, in a letter to SEC Chairman Paul Atkins, Democratic Senator Elizabeth Warren expressed her concerns, according to a copy reviewed by Reuters, where she said,
“All SEC decisions and actions involving (Trump Media & Technology Group) and President Trump’s financial interests should be carefully managed to ensure that they are free from undue political interference and influence from the President and his administration.”
Thus, with bold investments in Bitcoin, now totaling around $2 billion, and an expanding suite of ventures including Truth+, Truth.Fi, and planned ETFs through a partnership with Yorkville America, the company is signaling a strong commitment to digital innovation.